August 27, 2012

PLF asks Federal Circuit to reinstate Lake Michigan landowners’ takings claims

By Brian T. Hodges Senior Attorney

A taking occasioned by a gradual physical process, such as erosion or inundation, presents the landowner with a particularly difficult problem.  How can the owner comply with the 6 year statute of limitations for filing a taking claim against the federal government when he does not even know that his land is being taken?  PLF attorneys tackle this question in an amicus brief filed earlier today in the case, Banks v. United States.

Between 1836 and 1903, the U.S. Army Corps of Engineers constructed jetties in Lake Michigan to stabilize the entrance of the St. John River into a harbor on Lake Michigan for commercial shipping.  The Corps increased the size of the jetties in 1952 and, between 1950 and 1989, encased them in impermeable steel sheeting.  Over the years, the Corps became aware that its jetties were causing accelerated erosion and damage to lakefront properties to the south of the harbor.  The Corps attempted to mitigate for this harm by adopting a series of largely unsuccessful beach renourishment programs between 1970 and 1999.  In 1999, 37 property owners sued for inverse condemnation alleging that the jetty project effected a permanent physical taking of their shoreline properties.

The fact that a physical taking had occurred was not seriously disputed during the liability phase of the trial.  Instead, the case focused on whether the landowners had filed their complaint within the 6-year statute of limitations.  This question turned on two takings doctrines.  First, in United States v. Dickinson (1947), the U.S. Supreme Court held that in cases involving a gradual physical process, like seepage or erosion, the statute of limitation will not begin to accrue until the conditions had sufficiently stabilized.  Conditions are considered “stabilized” when it becomes clear that the gradual process set into motion by the government has effected a permanent taking. Second, in Applegate v. United States (1994), the Federal Circuit held that, under the Dickinson stabilization doctrine, a takings claim will not accrue when the government is making efforts to mitigate for actions that would otherwise constitute a taking.

Applying these rules, however, can be difficult.  In fact, the Banks court addressed the claims accrual question in this case three times, coming to three very different conclusions.  During the liability phase of this case, the lower court concluded that the claims accrued in 1989 when all of the work on the jetties was completed.  The Federal Circuit reversed that decision because the trial court failed to take into consideration the Army Corps’ mitigation efforts which continued into 2000.  On remand, the trial court determined that Banks’ claims accrued in January?27, 2000, when the Army Corps issued its determination that its mitigation efforts were unsuccessful and the harm from the jetties was irreversible.  Then after the damages phase of the trial, the court changed its mind and concluded that Banks’ claims had accrued at some point between 1903 and 1952 and dismissed all of the claims as time barred.

PLF attorneys filed an amicus brief in support of the landowners’ appeal because it is essential, both for the parties and future takings litigants, that the courts correctly apply the stabilization doctrine.  After all, an incorrect decision will deprive a landowner of his or her right to just compensation under the Fifth Amendment.

PLF’s brief explains that the stabilization doctrine does not allow courts to dismiss claims based on generalities or presumptions.  The date on which a taking claim accrues will vary from lot to lot based on a variety of site specific conditions that can alter or render uncertain the progression of the physical damage.  This requirement that a trial court to engage in a sufficiently individualized analysis before dismissing a gradual taking claim as time-barred is not a technicality—it is a necessity.

In fact, in Boling v. United States (2000), a case where the trial court dismissed multiple property owners’ takings claims as time-barred, the Federal Circuit acknowledged that remanding a decision for entry of additional findings could wind up being a “pro forma exercise.”  But it was more important that the lower court’s decision be correct.  The Federal Circuit was right.  On remand, the trial court found that three of the previously dismissed landowners’ claims were, in fact, timely.  Had the Federal Circuit allowed the trial court to dismiss their claims without making the required individual inquiry, they would have been wrongly deprived of their rights to just compensation.

Given this, PLF’s amicus brief urges the Federal Circuit to reverse the trial court’s decision to dismiss all 37 landowners complaints without engaging in the required analysis.

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